Calix Reports Fourth Quarter and Full Year 2017 Financial Results

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Published: Feb 13, 2018 4:02 p.m. ET

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PETALUMA, Calif., Feb 13, 2018 (GLOBE NEWSWIRE via COMTEX) --

Calix, Inc.
CALX, -2.08%
today announced unaudited financial results for the fourth quarter and year ended December 31, 2017. Revenue for the fourth quarter of 2017 was a fourth quarter record $137.9 million, an increase of 4.6% compared to $131.8 million for the fourth quarter of 2016. Revenue for fiscal year 2017 was a record $510.4 million, an increase of 11.2% compared to the $458.8 million for fiscal year 2016.

"We ended 2017 on an all-time high with record quarter and annual revenue and unprecedented customer interest in our strategic cloud and software platforms. Q4 also saw the announcement of EXOS, the first carrier class premises operating system designed to help service providers turn smart home and business complexity into opportunity," said Calix, Inc. President and CEO Carl Russo. "Now fully armed with Calix Cloud, EXOS, AXOS and aligned Calix Services, we start 2018 with an unrivaled solutions portfolio and the opportunity to leverage our innovations and transform our industry."

The GAAP net loss for the fourth quarter of 2017 was $12.9 million, or ($0.25) per basic and fully diluted share, compared to a GAAP net loss of $11.5 million, or ($0.23) per basic and fully diluted share, for the fourth quarter of 2016. The GAAP net loss for fiscal year 2017 was $83.0 million, or ($1.66) per basic and fully diluted share, compared to a GAAP net loss of $27.4 million or ($0.56) per diluted share for fiscal year 2016.

"Gross margins hit a four-quarter high as we saw benefits from previously implemented process improvements in our services business," said Cory Sindelar, Calix, Inc. CFO. "Operating expenses as a percent of revenue hit a five-quarter low as efficiencies from our agile DevOps environment and hardware abstracted platforms continued to deliver benefits across our development teams, and cost savings from our previously announced restructuring plan provided leverage on higher revenue."

The Company's non-GAAP net loss for the fourth quarter of 2017 was $7.8 million, or ($0.15) per fully diluted share, compared to a non-GAAP net loss of $6.8 million, or ($0.14) per fully diluted share, for the fourth quarter of 2016. The non-GAAP net loss for fiscal year 2017 was $65.6 million, or ($1.31) per basic and fully diluted share, compared to a non-GAAP net loss of $7.0 million, or ($0.14) per diluted share for fiscal year 2016.

Reconciliations of our operating results and loss per diluted share from GAAP to non-GAAP are provided in this release.

Outlook

Calix is providing forward-looking estimates for first quarter 2018 results as follows:

First quarter 2018

Revenue

$102.0 - $108.0 million

Non-GAAP gross margin

39.0% - 41.0%

Non-GAAP operating expense

$49.5 - $51.5 million

Non-GAAP net loss per share

($0.20) - ($0.16)

Operating cash flow

Positive

The Company estimates that GAAP net loss per share will be approximately $0.12 higher for first quarter of 2018 due to the inclusion of stock-based compensation and restructuring charges. A reconciliation of the GAAP to non-GAAP outlook is provided in this release.

Restructuring Plans

In March 2017, the Company adopted a restructuring plan that sought to realign the Company's business to increase its focus towards its investments in innovative Software Defined Access and cloud products, while reducing its cost structure in the traditional systems business. Under this plan, the Company has recognized restructuring charges of approximately $4.2 million for fiscal 2017, consisting primarily of severance and other one-time termination benefits. All actions under this plan have been completed as of the end of fiscal 2017.

In February 2018, we engaged in further targeted actions to realign our business towards an increased focus on investments in our innovative Software Defined Access and cloud products. These actions may result in up to approximately $3.0 million in additional restructuring charges taken in the first quarter of 2018 and are expected to result in annualized cost savings of up to $16.0 million.

Conference Call

In conjunction with this announcement, Calix will host a conference call at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) today to discuss its fourth quarter 2017 financial results. A live audio webcast and replay of the call will be available in the Investor Relations section of the Calix website at http://investor-relations.calix.com.

The conference call and webcast will include forward-looking information.

About Calix

Calix, Inc.
CALX, -2.08%
- Innovative communications service providers rely on Calix platforms to help them master and monetize the complex infrastructure between their subscribers and the cloud. Calix is the leading global provider of the cloud and software platforms, systems and services required to deliver the unified access network and smart premises of tomorrow. Our platforms and services help our customers build next generation networks by embracing a DevOps operating model, optimize the subscriber experience by leveraging big data analytics and turn the complexity of the smart home and business into new revenue streams.

Forward-Looking Statements

Statements made in this press release and the earnings call referencing the press release that are not statements of historical fact are forward-looking statements. Forward-looking statements are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, but are not limited to, statements about potential customer or market opportunities, opportunities with existing and prospective customers, estimates and planned cost savings related to restructuring plans and future financial performance (including the outlook for first quarter of fiscal 2018). Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to fluctuations in the Company's financial and operating results, the capital spending decisions of its customers, changes and disruptions in the market and industry, changes in regulations and/or government sponsored programs, competition, its ability to achieve market acceptance of new products and solutions, its ability to grow its customer base, fluctuations in costs associated with its products and services including higher costs due to project delays and changes, cost overruns and other unanticipated factors, as well as the risks and uncertainties described in its annual reports on Form 10-K and its quarterly reports on Form 10-Q, each as filed with the SEC and available at www.sec.gov, particularly in the sections titled "Risk Factors." Forward-looking statements speak only as of the date the statements are made and are based on information available to the Company at the time those statements are made and/or management's good faith belief as of that time with respect to future events. Calix assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not place undue reliance on any forward-looking statements.

Use of Non-GAAP Financial Information

The Company uses certain non-GAAP financial measures in this press release to supplement its consolidated financial statements, which are presented in accordance with GAAP. These non-GAAP measures include non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net income (loss) and non-GAAP basic and diluted income (loss) per share. These non-GAAP measures are provided to enhance the reader's understanding of the Company's operating performance as they primarily exclude certain non-cash charges for stock-based compensation, amortization of acquisition-related intangible assets, restructuring charges and acquisition-related costs, which the Company believes are not indicative of its core operating results. Management believes that the non-GAAP measures used in this press release provide investors with important perspectives into the Company's ongoing business performance and management uses these non-GAAP measures to evaluate financial results and to establish operational goals. The presentation of these non-GAAP measures is not meant to be a substitute for results presented in accordance with GAAP, but rather should be evaluated in conjunction with those GAAP results. A reconciliation of the non-GAAP results to the most directly comparable GAAP results is provided in this press release. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

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